Exam 13: Analyzing Financial Statements

Lucas Company has provided the following information: • Cash flow from operating activities,$360,000 • Net income,$306,000 • Interest expense,$30,000 • Interest cash payments,$20,000 • Income tax payments,$240,000 • Income tax expense,$246,000 - What was Lucas' quality of income ratio?

Agnes Company reported the following data: - What was the current ratio?

The year-end adjusting entry to adjust the unearned revenue account for revenue earned decreases which of the following ratios?

The fixed asset turnover ratio measures a company's ability to use its property,plant,and equipment to generate revenues.

Agnes Company reported the following data: - What was the inventory turnover ratio?

The extent to which a company uses its liabilities to leverage up its return to stockholders is measured by the difference between ROE and ROA.

Main Street Company paid out $2.30 in dividends per share of common stock and had earnings per share of $5.00 during 2019.The market price of the stock on December 31,2019 was $21.00 per share.There were 15,000 shares of stock outstanding for the entire year.The dividend yield as of December 31,2019 is closest to:

Potaw Company reported the following data at the end of 2019: - The average number of days to collect receivables during 2019 is closest to: (Assume 365 days in a year. )

The base amount in preparing component percentages for an income statement is usually which of the following?

Longhorn Company reported the following data at year-end: Calculate each of the following ratios.Round your answers to two decimal places. A.Debt-to-equity ratio B.Current ratio

With component percentages,the numerator comes from the income statement and the denominator comes from the balance sheet.

Which of the following ratios are not affected by issuing long-term bonds payable in exchange for cash?

Which of the following statements is incorrect?

Cromwell Company began the year with a balance in inventory of $110,000 and ended the year with a balance of $102,000.The net sales for the year were $983,000 with a gross profit on sales of $295,000.The inventory turnover ratio is closest to:

Earnings per share (EPS)is affected by treasury stock transactions.

Lee Company has provided the following information: • Cash flow from operating activities,$240,000 • Net income,$204,000 • Interest expense,$20,000 • Interest cash payments,$10,000 • Income tax payments,$140,000 • Income tax expense,$136,000 - What was Lee's times interest earned ratio?

A high price/earnings ratio usually indicates the market is optimistic about the company's future earnings potential.

At the end of 2019,Jared Corporation reported a return on assets of 16%,average total assets of $365,000,and average total liabilities of $165,000. What was Jared's net income?

Finding comparable companies in order to compare performance is important because ratios in isolation are difficult to evaluate.

The net profit margin ratio considers the asset base utilized to earn income.